CN Energy Announces Exercise of Greenshoe Option

This pumps the proceeds from the IPO to $23 million for the profitable small-cap Chinese company.
CapitalWatch StaffFeb 18,2021,16:45

CN Energy Group. Inc. (Nasdaq: CNEY), which debuted in a New York initial public offering earlier this month, announced today that its underwriters exercised the greenshoe option to purchase an additional 750,000 shares.

Thus, the proceeds from the listing reached $23 million for the Lishui, China, company, a manufacturer of wood-based activated carbon and a producer of biomass electricity.

Overall, CN Energy sold 5.75 million ordinary shares priced at $4 apiece. That was the lower end of the expected range of $4 to $5. Network 1 Financial Securities acted as the underwriter on the deal.

On IPO day, the stock peaked at $8.80 per share early, then leveled off to close at $5.74. Since then, the stock has stayed above the issue price but did not exceed its Day One high point. As of Thursday morning, CNEY shares traded at $6.87 each, down 1%. Its market cap stands at $107.6 million.

In its statement today, CN Energy reiterated that it plans to use the proceeds from its offering “to fund the construction of a new manufacturing facility in Manzhouli City and for research and development, working capital, and general corporate purposes.”

CN Energy supplies wood-based activated carbon for uses in pharmaceutical manufacturing, industrial manufacturing, water purification, environmental protection, and food and beverage production through its subsidiary, Khingan Forasen. It gets raw materials in the Greater Khingan Range, as well as Inner Mongolia, and operates manufacturing facilities in Tahe County, Heilongjiang Province.

The company also produces biomass electricity generated in the process of producing activated carbon. It supplies the electricity to State Grid Heilongjiang Electric Power Co.

CN Energy is profitable, even in the year hit hard by the Covid-19 woes, it turned up a profit. For the year through September 2020, it reported net income increased to $2.3 million from $1.7 million in the preceding year, while revenue increased 15% to $12.5 million.

CN Energy was one in a slew of listings, big and small, from China this year in New York. 2021 has been a good year for Chinese IPOs so far, their count now exceeding the number of listings at the same time last year. Perhaps, this signals a long-awaited warming up of both Wall Street and Washington towards Chinese companies.

Topics:CNEY, CN Energy, China, IPO